Pool miners follow a similar workflow, illustrated below, which allows mining pool operators to pay miners based on their share of the work done. The mining pool gets new transactionstransactions - A transaction spending satoshis. from the network using
dashd. Using one of the methods discussed later, each miner's mining software connects to the pool and requests the information it needs to construct block headers.
In pooled mining, the mining pool sets the target thresholdtarget threshold - The target is the threshold below which a block header hash must be in order for the block to be valid, and nBits is the encoded form of the target threshold as it appears in the block header. a few orders of magnitude higher (less difficult) than the network difficulty. This causes the mining hardware to return many block headers which don't hash to a value eligible for inclusion on the block chainblock chain - A chain of blocks with each block referencing the block that preceded it. The most-difficult-to-recreate chain is the best block chain. but which do hash below the pool's target, proving (on average) that the miner checked a percentage of the possible hash values.
The minerminer - Mining is the act of creating valid Dash blocks, which requires demonstrating proof of work, and miners are devices that mine or people who own those devices. then sends to the pool a copy of the information the pool needs to validate that the header will hash below the target and that the block of transactions referred to by the header merkle rootmerkle root - The root node of a merkle tree, a descendant of all the hashed pairs in the tree. Block headers must include a valid merkle root descended from all transactions in that block. field is valid for the pool's purposes. (This usually means that the coinbase transactioncoinbase transaction - The first transaction in a block. Always created by a miner, it includes a single coinbase. must pay the pool.)
The information the miner sends to the pool is called a share because it proves the miner did a share of the work. By chance, some shares the pool receives will also be below the network target---the mining pool sends these to the network to be added to the block chain.
The block rewardblock reward - The amount that miners may claim as a reward for creating a block. Equal to the sum of the block subsidy (newly available duffs) plus the transactions fees paid by transactions included in the block. and transaction fees that come from mining that block are paid to the mining pool. The mining pool pays out a portion of these proceeds to individual miners based on how many shares they generated. For example, if the mining pool's target threshold is 100 times lower than the network target threshold, 100 shares will need to be generated on average to create a successful block, so the mining pool can pay 1/100th of its payout for each share received. Different mining pools use different reward distribution systems based on this basic share system.
Updated almost 2 years ago